Market Matters Blog

Corn basis fell in the past week as cash prices continued to rise and farmer movement of grain was steady prior to spring fieldwork. Basis weakness was also seen along the river. Corn loadings were lower through the week ending March 19, according to USDA. Although basis fell week-over-week, the DTN National Average Corn Basis is still higher than the 5-year highest basis at this time.

Average soybean basis was unchanged this week and soybean futures dropped 6 days in a row on decreased demand for export at the Gulf. Brazil ports are still backlogged with ships waiting to load and the impact was visible in China's recent cancellation of 2 million tons of soybeans scheduled to come from Brazil. Adding to Brazil's problems is the threat of a strike by port workers early next week. Barge freight was not a factor through last week as freight was lower than the prior week and demand for empty barges has been quiet according to barge line sources. Barge freight on the Illinois River was down 6% from last week and down 15% from last year for the week ending March 19, USDA reported.

"During the week ending March 16, barge grain movements totaled 442,827 tons, 21% lower than the previous week, but 20.8% higher than the same period last year. During the week ending March 16, 290 grain barges moved down river, down 23% from last week; 448 grain barges were unloaded in New Orleans, up 18% from the previous week," according to USDA's Weekly Grain Transportation repot.

Water levels on the Mississippi have been good for 9-foot drafts or higher the past few weeks thanks to rain and snow. Interesting to note is that in mid-January, water levels in St. Louis were at -3 feet and as of March 21 levels are at an 18-foot gage. The gage measures water levels below or above zero with flood stage in St. Louis measured at 30 feet. The U.S. Army Corps of Engineers reported recent drought control measures including the release of water on the Missouri River will put the navigable portion of the Missouri at 81% of normal for the calendar year, USDA said. Barges that travel on the Missouri will be subject to 8-foot drafts, which mean lighter loads for shippers. While this is not expected to greatly affect movement of farm products on the Missouri River, the unknown at this point is if the restricted flows may have an impact on the Mississippi River water levels in late spring or summer. The other unknown is if there will be significant rainfall to keep the Mississippi River healthy this shipping season.